The first of 3.5 million solar panels planned for 150 business rooftops were installed Wednesday, utility giant Southern California Edison announced, calling it the start of what it intends to be the world's largest solar panel installation, covering two square miles.

SCE is installing 33,000 panels on top of a 600,000-square-foot warehouse in Fontana, Calif., that is being leased from ProLogis, a company that owns and manages distribution centers.

"When completed, this first installation will be capable of generating 2 million watts of power, enough electricity to supply approximately 1,300 average Southern California households at a point in time," SCE said in a statement. "This new, clean power supply will be fed directly into the nearest neighborhood distribution circuit, strengthening grid reliability in the nation’s fastest growing urban area, the Inland Empire region of Riverside and San Bernardino counties."

"The solar modules will be connected directly to the nearest neighborhood circuit, eliminating the costly, time-consuming step of building new transmission lines to bring power to customers," SCE added in elaborating on the benefits of solar. "The output of solar panels closely matches peak customer demand — lower in the morning and evening, higher in the afternoon."

If regulators approve its plans, SCE intends to install 3.5 million solar panels, or 250 megawatts of solar generating capacity, over five years. That's enough to serve 162,000 homes. SCE said other building sites and suppliers had yet to be decided.

First Solar, a company that developed proprietary thin-film photovoltaic technology, is installing the Fontana panels.

SCE said it had told regulators that the expected capacity cost per installed watt would be about $3.50, "half the average current capacity cost of other photovoltaic installations."

Per kilowatt-hour costs are expected to be around 20 cents, SCE added.

California Gov. Arnold Schwarzenegger has championed solar power in the state with a "Million Solar Roofs" program that provides financial incentives. Solar power is also seen as helping California with its goal of curbing emissions of greenhouse gases tied to warming, and generating 20 percent of the state’s electricity from renewable energy.

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